Goldman Sachs has issued an upbeat outlook on India’s hospital sector forecasting a strong multi-year growth cycle driven by rapid capacity expansion, rising healthcare demand and improving operational efficiency across major private hospital chains. According to the brokerage, India’s listed hospital networks are expected to add more than 17,000 beds by FY2030 with much of this growth concentrated in major metropolitan cities. Despite the substantial planned expansion, Goldman Sachs believes the threat of oversupply remains low, noting that many regions across India remain underserved in tertiary and quaternary care. The firm attributes the sustained demand to structural drivers such as growing urbanization, higher disposable incomes, greater health insurance coverage and the rising prevalence of non-communicable diseases.
Why India’s Hospital Sector Is Heating Up?
The bullish stance comes against the backdrop of a broader investment surge within India’s healthcare landscape. Over the last two years, hospitals have driven more than US$30 billion in overall healthcare investments, including major mergers, acquisitions, and private equity funding.
According to a 2022-2024 report by Grant Thornton Bharat and Association of Healthcare Providers of India (AHPI), hospitals undertook M&A deals worth US$ 6.74 billion and raised nearly US$ 5 billion from private equity investors. The share of hospitals in total healthcare FDI has risen sharply hospitals now account for ~50% of FDI into healthcare, up from ~24% in FY21. The underlying demand drivers include rising disease burden (especially non-communicable diseases), increasing insurance penetration, growing per-capita income and under-penetration of quality tertiary/quaternary care particularly outside major metros. Besides metro cities, many hospital chains are now expanding rapidly into Tier II and Tier III cities a huge growth opportunity given India’s population distribution and unmet healthcare needs. Industry analysts attribute this momentum to rapid shifts in demand, a growing middle class seeking better care and the attractive long-term economics of hospital operations.
Investment Views and Top Hospital Chains
Within this optimistic sector view, Goldman Sachs has identified several hospital operators as attractive investment opportunities. The brokerage has placed a strong emphasis on companies that combine disciplined expansion with consistent operating performance. It highlights KIMS Hospitals as a key outperformer, citing its robust pipeline and the market’s undervaluation of its growth potential. Max Healthcare is recognized as one of the most efficient operators in the sector, expected to deliver steady revenue expansion and margin improvement. Apollo Hospitals, with its nationwide footprint and strong brand equity is projected to benefit from economies of scale and ongoing upgrades across its network. Fortis Healthcare, meanwhile, receives a more neutral assessment, with Goldman Sachs noting that recent stock performance has already priced in a significant portion of near-term gains.
Expanding Beyond Metros
A notable trend shaping the sector is the expansion of hospital networks into Tier II and Tier III cities. As India’s population becomes more widely distributed and healthcare awareness rises, these regions offer significant growth potential. Many chains are now prioritizing developments in these emerging markets where the gap between demand and available high-quality care is largest. This shift is expected to play a major role in the next phase of India’s healthcare expansion, improving regional accessibility to advanced medical services that have traditionally been concentrated in big cities.
What the Growth Wave Means?
Goldman Sachs expects that the combination of sustained demand, bed expansion, and improving operating leverage will drive earnings growth across the sector from FY25 to FY28. As newly added hospitals ramp up and achieve higher occupancy rates, fixed costs will be spread more effectively, leading to stronger margins and improved profitability. For the broader healthcare ecosystem, this investment boom promises better access to quality care across India, though it also raises the need for thoughtful regulation to ensure affordability and equity as the sector becomes increasingly attractive to investors.
